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“Issues and Challenges for Integrating Renewable Energy

Technologies in Building Design”

Vishal GoyalAssistant General Manager

National Housing Bank January 29, 2014

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BackgroundProjected Timeline Demographic Changes

By 2050 World’s population will reach 9 Billion

By 2050 70% of the world’s population will live in urban areas, up from 50% today

By 2030 40.8% of India’s population will be living in urban areas (current 28.4%), increasing to 50% by 2041 Housing sector accounts for nearly 40% of

energy consumption Populations in emerging markets are creating a

huge demand for homes that need to be both affordable and green

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Energy efficient housing balances all aspects of energy use in a building Lighting Space utilization Ventilation Use of energy efficient building materials Use of energy efficient equipment Use of alternative and renewable sources of

energy Reducing energy demand at source

More sustainable in long run Often with little incremental cost

Energy Efficiency in Housing

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PolicyNational Urban Housing & Habitat Policy

(NUHHP) 2007 Appropriate ecological standards for healthy

environment and better quality of life. Implementing the concept of ‘green’ and

‘intelligent’ buildings. “Strong recognition of financial sector’s

crucial role in integrating climate considerations and sustainability into their operations”

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Statutory body National Housing Bank Act, 1987

Vision: “Promoting inclusive expansion with stability in housing finance market”

Mission: "To harness and promote the market potentials to serve the housing needs of all segments of the population with the focus on low and moderate income housing "

Objectives: “ To operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support incidental to such institutions and for matters connected therewith …”

(National Housing Bank Act, 1987)

About NHB

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Functionso Financingo Regulatory and Supervisoryo Promotional

Aimed at confidence-building among Savers, Borrowers, Lendersand Investors; Policy Makers and International Stakeholders

Multi-prongedSimultaneous intervention on both the demand (financial) and supply (real) side of the housing sector

Multi-AgencyFinancing a range of institutions for extensive outreach.

About NHB….Contd.

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Refinance Direct Finance

Equity Participation

Term LoansCommercial

Banks Housing Finance

Companies (HFCs)

Cooperatives

Term Loans Housing

Corporations Societies PPPs Self Help Groups

Equity stake Rural HFCs HFCs involved in

housing finance to low income segments

forGeneral

HousingRural HousingSpecial

projects(in natural disaster affected areas)

NHB’s Financing Products

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NHB’s Intervention in Energy Efficiency NHB’s Energy Efficient Housing Refinance

Scheme for the Primary lending Institutions (in partnership with KfW, Germany for the line of credit) and;

NHB’s Refinance Scheme for installation of solar water heating and solar lighting equipments

MNRE and NHB proposed to sign MoU on Refinance cum Capital Subsidy for Solar Equipment Financing.

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Important step forward in promoting use of energy efficiency techniques in buildings

Programme initiated jointly by NHB and KfW, German Development Bank in 2008 pursuant to Indo - German Government-to-Government negotiations

Prime objective of the Programme – Promoting Energy Efficient Residential Housing

First of its kind of programme in India

NHB KfW Partnership

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Line of Credit of € 50 million on 31st Dec’2010. Technical assistance grant of €1.5 million. The Programme

Financial and technical assistance to stakeholders to promote EE residential housing

Financial assistance - housing loans to individual borrowers through retail lending institutions for purchase / construction of EE residential houses / flats

Technical assistance – Fraunhofer TERI Assessment Tool to calculate the level of energy savings of EE houses on the baseline (developed by TERI / Fraunhofer)

Partnership contd…

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Initial implementation - facilitator appointed to assist NHB

Identification of EE building projects Identification of retail lending institutions Assessment of refinance potential for NHB Gathering of borrower information Assistance in energy calculation & certification Compliance with NHB’s reporting requirements to

KfW Launching of logo and website for the programme –

ee-homes.com Signed MoU with IGBC and AdARSH

Partnership contd…

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NHB has utilised the entire sanctioned amount of € 50 million i.e. equivalent to INR 381.53 crore

12 Projects comprising of 162 towers consisting of 21,577 residential units have been certified in the cities of Lucknow, Nagpur, Mumbai, Bangalore and NCR

2065 individual loans have been refinanced by NHB

Energy Savings of 1,864 MWh/p.a. and has avoided CO2 emissions of 32,800 tons per annum

LICHFL, Axis Bank, ICICI Bank, HDFC, DHFL, and Tata Capital have availed Refinance from NHB under the Programme

IMPACT

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Snapshot of some Certificates

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Reduction in energy usage without compromise on comfort

Building of sustainable housing and habitat to positively impact society and environment

Availability of funds - source for encouragement Lenders Borrowers

Availability of assessment tool - help to developers

Benefits from the Programme

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Refinance Scheme for Installation of Solar Water Heating and Solar Lighting Equipments in Homes

Launched on the Occasion of NHB’s Silver Jubilee year with the agenda to promote the use of solar equipment in the domestic context so as to conserve energy and reduce dependence on fossil fuels.

Scheme Details are as below:

Purpose: To provide refinance assistance in respect of loans extended by PLIs for: purchase and installation of solar water heating systems purchase and installation of solar lighting systems

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Eligible Loans ▪ Loan size - upto 50,000 per equipment▪ Location - Rural / Urban▪ Date of origination of loan - Loans disbursed on or after 01-07-

2012▪ Tenure - 3 years to 7 years

Type of Interest Rate - Refinance under the Scheme will be extended at rates of interest which shall remain fixed for the entire tenure.

Impact: Since the launch of the scheme, 18440 equipments have

beeninstalled and refinance to the tune of 31.04 crore

Refinance Scheme for Installation of Solar Water Heating and Solar Lighting Equipments in Homes…..Contd

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Lack of awareness Perception

Energy efficiency is expensive requiring huge upfront investments

Marketing gimmick of developers High maintenance cost

Lack of awareness and information about Government schemes promoting use of solar energy, etc.

Barriers in Energy Efficient Housing Projects

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Absorption capacity / consumption of EE products / market for EE residential housing in India to be enhanced / encouraged

Scalability important due to challenges Cost aspects Huge housing shortage Existing housing Present product for niche market segments

Programme to be expanded to include existing housing units

Next Steps

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A snap shot of few certifiedprojects under the Program

Sahara City HomesNagpur Savings – 26%Number of Units – 2,646

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BCIL ZED Collective, BangaloreSavings – 40%Number of Units - 44

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BCIL ZED Woods, BangaloreSavings – 33%Number of Units-60

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Lotus Panache, NoidaSavings – 21%Number of Units – 4,048

Lotus Boulevard, Noida

Savings – 20%Number of Units –

2,224

3C Projects

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HIRCO, MumbaiSavings – 34%Number of Units – 1,212

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Solar Panels being installed in the dwelling units in a non-electrified village of U.P. under the Refinance Scheme for installation of solar water heating and solar lighting equipments of NHB

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Energy efficiency - priority area for Government and policy makers

NHB-KfW partnership - new initiative with huge scope

Solar Refinance Scheme is expected to go a long way towards improving the penetration and usage of solar lighting and solar water heating equipments in homes.

Finance - an important tool for promoting energy efficiency in buildings

Scalability - an important factor Multi-pronged approach to overcome barriers

To Summarize

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Thank You